New Delhi, Dec 11 (Inditop.com) In another sign of robust recovery in the Indian economy, the country’s industrial output is projected to have expanded 10.3 percent in October, as per the latest official data released Friday.
The significant growth in the index for industrial production has come on the back of a 9.6 percent expansion in September and 10.4 percent the month before, shows the new data released by the Central Statistical Organisation.
Recovery has been particularly impressive for the manufacturing sector, which grew by 11.1 percent in October.
The mining sector expanded by 8.2 percent, while electricity was up 4.7 percent.
As a result, the overall expansion of industrial output for the first seven months this fiscal was 7.1 percent.
In terms of industries, wood products and furniture along with transport equipment and parts grew the most at 18.9 percent, followed by basic chemicals and products (except those of petroleum and coal) at 18.7 percent and machinery at 18.3 percent.
On the other hand, the jute and other vegetable fibre textiles sector (except cotton) has shown a negative growth of 15.5 percent.
October also saw sectors producing basic goods grow by 5 percent over the corresponding month last year, while capital goods production went up 12.2 percent.
Consumer durables and consumer non-durables sectors recorded growth of 21 percent and 8.1 percent, respectively.
“Growth in the first half of this fiscal year is in line with expectations. The stimulus has started showing results,” Finance Minister Pranab Mukherjee told the Lok Sabha after release of the data.
He was referring to the three doses of fiscal stimuli — worth Rs.186,000 crore (Rs.1.86 trillion or $37 billion) — since last December to help the Indian economy tide over the adverse impact of the global economic crisis.
Planning Commission Deputy Chairman Montek Singh Ahluwalia also expressed optimism that economic expansion would continue in the coming months.
“To get a growth rate well above 10 percent is not a base effect,” he told reporters here. “There is an element of growth that is taking place which I hope will be sustained.”
India Inc too felt that the data reflected signs of the economy recovering, and said it was important not to withdraw supporting measures for some time.
“CII feels that it is imperative to nurture this momentum until the recovery sustains further,” said Chandrajit Banerjee, director general, Confederation of Indian Industry (CII).
“Any hike in policy rates at this point could affect the recovery, especially in those sectors where consumption and investment are sensitive to interest rate changes.”
Harsh Pati Singhania, president of the Federation of Indian Chambers of Commerce and Industry (FICCI), echoed the view.
“The latest figures show an all round improvement in all sectors. It shows the economy has recovered and can be hoped to achieve a high growth trajectory provided the present policy parameters are not changed,” said Singhania.
However, some analysts were less enthusiastic.
“The impact of the drought, and the Diwali holiday season appears to be significant contributors to the slowdown in momentum. Going forward, we expect the broad uptrend in economic activity to continue notwithstanding lower third quarter numbers,” said Rohini Malkani, an economist with the Citi group.
